The federal government has dropped the controversial issue of sales tax on services from the agenda of third meeting of National Finance Commission (NFC), which would be held on February 21, 2012, in Islamabad, well-informed sources told Business Recorder on Friday.
The date of the meting of NFC has been fixed and the letters containing agenda of the meeting have been sent to all members of the Commission. When contacted, Dr Kaiser Bengali told Business Recorder that he had received the copy of the agenda and only matters related to monitoring were on the agenda of the next meeting. He told that Centre had also included the issue of sales tax on services in the agenda of first meeting of the NFC that had already been resolved in 7th NFC award.
Following inclusion of the issue in the agenda of first meeting of the commission, Sindh Chief Minister Qaim Ali Shah had written a letter of protest to President Asif Ali Zardari, wherein he had demanded that Federal Finance Ministry should erase the item-II (sales tax on services) from the agenda of NFC's meeting.
He said that despite strong protest by Sindh, Federal government had again placed this issue in agenda of the meeting held on December 16, 2011. "During that meeting, Sindh refused to discuss the issue of sales tax on services, which led to constitution of a high level committee to resolve this issue," he further said.
He hoped that the proposed committee would also discard the issue because it had already been settled in 7th NFC Award, following which Sindh had started collection of sales tax on more than 15 services through Sindh Revenue Board. It may be noted here that President Asif Ali Zardari had reconstituted the NFC in August 2011 for five years to work out the 8th NFC Award for distribution of resources among federating units. Its first meeting was held on November 21, 2011.
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